Imagine waking up one day and seeing a huge spike in user activity on your web3 platform, but not knowing where those users came from, or what part of your marketing triggered all the activity.
You can’t call it off as lucky. You shouldn’t. Something worked, and you can’t double down on it unless you know it. That’s where the web3 marketing attribution system helps.
In this blog, we’ll explore what web3 attribution is, how attribution works, and how you can use marketing attribution for your web3 products.
But to better understand why we need a new kind of marketing attribution for web3, let’s see how attribution has evolved over the decades.
Evolution of marketing attribution from newspapers to web 2.0
Marketing attribution is the process marketers use to determine what marketing strategies and touchpoints are responsible for sales and conversions. It helps evaluate the ROI of marketing channels and identify ways to connect with more customers.
Attribution works differently for offline (print, TV advertisements) and web2 mediums as compared to the web3 ecosystem. Understanding this evolution in attribution system will further clarify the need for new attribution systems based on the medium of user-business interactions.
Traditional promotion techniques depended on newspaper ads for spreading brand awareness and showcasing new products. In-person, door-to-door surveys measured the impact of print ads, but they lacked precision and sometimes incorrectly reflected consumer behavior.
TV advertisements
TV broadcasters use third-party agencies to measure an advertisement’s impact on customer behavior. These agencies rely on surveys. But again, they fail to calculate what actions led to product sales.
To help make attribution more accurate for TV ads, there are software programs that can correlate TV ad broadcasting with real-time web traffic to measure an ad’s effectiveness. Such software can measure any spike in online activity and purchasing behavior to help curate better ads.
Web 2.0
Web2 platforms like social media and e-commerce sites track user data and store them on centralized servers. So it’s easier for marketers to use the readily-available data for marketing attribution across web2.
Besides, the use of cookies and device activity tracking simplifies marketing attribution on web3.
Marketing analysts use multiple marketing attribution models to determine successful conversions on web2.
Types of marketing attribution models
Depending on which touchpoint gets the credit, there are primarily two marketing attribution models.
Single source attribution
As the name suggests, the single-source attribution model accredits only one touchpoint for a successful sale. The single-source model is further divided into two categories:
- First-touch attribution: It gives credit to the first channel the lead interacted with. For example, if a consumer comes across a paid ad on Facebook or Instagram, the first-touch model would attribute the social media ad to any purchase.
- Last-touch attribution: It assigns credit to the final marketing channel without considering prior customer engagements. Identifying the last touchpoint is easier but it comes at the cost of missing out on potentially valuable points.
Multi-source attribution
The multi-source or multi-touch attribution (MTA) model allocates credit to all contributing marketing channels for a successful conversion. The MTA model can be divided into four categories:
Linear attribution: It assigns equal credit to all consumer touchpoints but downplays the value of potentially more important points.
Time-decay attribution: It gives more credit to recent touchpoints compared to older ones for impacting sales.
Position-based attribution: It refers to a U-shaped model with 40% credit to the first touch, 40% to lead creation, and 20% to intermediate touchpoints. Another W-shaped model gives 30% credit to first, lead, and opportunity creation touchpoints with 10% to middle points.
Custom attribution: It’s a complex model where marketers can assign customized weightage to individual touchpoints based on the industry type, nature of marketing channels, and consumer behavior.
Most web2 platforms use either of the aforementioned marketing attribution models since all user data is stored in a single place.
However, as web3 interactions are a combination of on-chain and off-chain user activities, web2 attribution systems aren’t effective to track web3 user activities. We need a new way to understand and use attribution on web3.
So, let’s start by defining what web3 attribution is.
What is web3 attribution?
You’re running different types of web3 marketing campaigns to get more users to check out your NFT marketplace and make purchases.
At the end of the week, you check out your dashboard to see how they fared.
You got over 10,000 visitors to your marketplace, and 500 of them purchased an NFT.
Now that you’ve managed to rake in some sales, you have a few questions:
- Which action of interest (joining the Discord server, Twitter spaces, subscribing to a newsletter, etc) managed to drive the most conversions?
- How many users did each platform or campaign bring?
- Based on the answer to the above query, is it reasonable to continue investing in this campaign or platform?
Web 3 attribution answers these questions.
It tells you which platform or content piece the user interacted with before making a purchase and helps you understand how much each platform or content piece contributes to each conversion.
In other words, attribution models help you assign the credit of a purchase or other significant actions like completing a transaction to the appropriate platform.
They help you clearly identify the campaigns that drive the most or least value so you can conduct data-backed campaign optimization for better ROI.
Additionally, they’re used to map out customer journeys accurately — no single entity or platform can control or impact the data you collect or take credit for it due to the decentralized and immutable nature of the blockchain.
This helps you understand customer behavior and identify opportunities to improve customer experience and retention rates.
All in all, web3 attribution, like web2 attribution, enables you to make better decisions regarding future initiatives and enhance your web3 marketing strategy accordingly.
However, to complete the web3 attribution loop, you must also combine data from the web2 world. That’s important because web2 attribution can tell you where your users come from while web3 attribution identifies users that convert and what activities they perform.
How does web3 attribution work?
Web3 attribution doesn’t work the same way as web2 attribution. For starters, web3 identities are pseudonymous, which means you must track user wallets instead of cookies.
Moreover, it’s possible to tokenize everything from user actions to transactions, thanks to blockchain and crypto infrastructure. This gives attribution a whole new meaning in web3.
But that doesn’t mean web2 data is irrelevant to web3 brands. In fact, web3 startups can attain the most effective web3 attribution by combining and analyzing data from across web2 and web3.
To first explain web3 attribution better, let’s look at the two primary ways web3 attribution works in web3.
Wallet-based attribution
Every transaction or activity that takes place on the blockchain can be associated with a user’s wallet address. By tracking the activities of these addresses on-chain, you can build an attribution map.
For instance, a decentralized exchange can use wallet-based attribution to see what percentage of on-chain transactions come from DEX aggregators like 1-INCH or Paraswap.
Similarly, an NFT marketplace like OpenSea can check out what percentage of on-chain transactions occurring on the platform come from Uniswap’s NFT aggregator.
In addition to this, you can set up event-based triggers using Ethereum smart contracts to capture desired actions like purchasing an NFT or completing a sale or trade.
Once the user completes a transaction, the platform records it, updates the user’s wallet details and attributes the purchase to their crypto wallet.
Token-based attribution
With blockchain, it’s possible to convert every user action and contribution into a digital token that’s securely stored on-chain. This not only revolutionizes how communities operate but also helps with attribution.
Let’s look at a simple example of a web3 loyalty program with three stages to understand this better.
As part of the loyalty program, users must complete at least five tasks and earn a certain number of tokens to move to the next stage.
For every task they complete, they earn X amount of reputation tokens, which they can exchange for loyalty tokens.
Users can either trade these loyalty tokens for another brand’s tokens or exchange them for governance tokens and rewards within the app.
You can track the interaction of the various types of tokens with the smart contract that triggers the desired actions. This can help you paint an accurate picture of the activities users are completing to get to the desired action.
In this sense, token-based attribution is quite similar to the event triggers that wallet-based attribution uses.
However, both ways of web3 attribution have a major drawback — they do not represent the complete user journey as there’s no information about users’ off-chain activities. Consequently, web3 attribution cannot help you understand whether a user came to your application from your Discord post, Twitter profile, or a blog you published.
That’s because it’s difficult to reconcile a user’s on-chain wallet identifier with their off-chain identity.
This is where Raleon comes in and helps you attribute user activities to accurate off-chain and on-chain sources. Let’s see how.
Get a holistic picture of off-chain and on-chain activities with Raleon
Raleon’s attribution engine combines off-chain and on-chain metrics to give you complete visibility into which marketing activities lead to on-chain conversions, and where your users are coming from.
For example, let’s say you are running multiple digital marketing campaigns such as social media marketing, content marketing, airdrops, etc. to drive users to your NFT marketplace.
While web3 attribution alone can only help you see which wallets use your platform for what activities, Raleon’s attribution engine can map a user’s entire journey, from web2 to web3.
That means, using Raleon, you will be able to pinpoint the specific marketing campaign that the user discovered first and what exact actions they took to reach your platform and sign up on it.
Raleon uses industry-standard UTM links (similar to the ones that Google ad tracking uses) to maintain user privacy and attribute events to link clicks.
Once the user clicks on a link, Raleon begins monitoring their activities. So, when they connect their wallet by clicking a link, it starts monitoring on-chain conversions.
While the limits to what you can track depend on what marketing strategies you employ, here are some interesting examples of web2+web3 attribution you can perform using Raleon:
- Users who clicked a link from your Twitter, the website pages they viewed before linking their wallet.
- Users who came from, say, your newsletter but didn’t connect their wallet. You can use this to specifically identify the pain points of those users, target them, and make them a personalized offer using action prompts.
- Overall performance of all your marketing channels, whether or not your website is able to retain users once they are there, what pages see the highest percentage of drop-off, and more. You can then double down on channels that work and refine those that aren’t the most effective.
- Complete web2 user journey from first discovering one of your marketing campaigns to connecting their wallet to your platform.
Web3 marketing attribution FAQs
What is web3 marketing attribution?
Web3 marketing attribution assigns credit to the right marketing channel or touchpoint for successful customer conversions. It’s beneficial for web3 marketers as it measures the efficacy of each marketing campaign and identifies channels with maximum ROI.
How does web3 marketing attribution work?
Web3 attribution tracks wallet or token interactions with smart contracts every time the associated user takes a desired action like making a purchase, conducting a trade, or selling their NFT.
Complete your marketing strategy with web3 attribution
Web3 attribution is undeniably a crucial component of the modern marketing stack.
It serves as a powerful feature rather than the ultimate solution, offering valuable insights into user journeys, origins, and user acquisition. Understanding where people come from and whether they convert is essential, but it's only the tip of the iceberg.
But to drive better conversions and maximize results, marketers must view it as part of a larger ecosystem. They must bring together a range of tools and strategies to inform decisions, optimize engagement, and continuously improve the overall customer journey.
Raleon is one such tool. In addition to being the first web3 attribution engine that integrates on-chain and off-chain data, it also helps you acquire user data, and set up campaigns and dashboards that help you understand the effectiveness of your marketing campaigns.
If you have any questions about Raleon’s tools or how they work, feel free to request access here.
